STB Hearing - Horizon Towers

Another "Going to Court" case, this time on Horizon Towers at Leonie Hill. Given the objections raised (that the price has become outdated, that some majority owners now wish to rescind the CSA, that the deal was not done in good faith) fall into gray legal territory, it's no wonder the lawyers representing the respective parties are all heavyweights (Senior Counsels & Partners).

Estate: Horizon Towers, Leonie Hill
Stage: Sold at $850psf. STB Hearing 27/7/07 to 2/8/07
Party: Minority owners represented by Kannan Ramesh and Karam Parmer from Tan Kok Quan Partnership, and Philip Fong from Harry Elias Partnership. 1 minority owner represented by Senior Counsel Michael Hwang.
Collective Sale Lawyer: Tan Rajah & Cheah [As of 7 Aug 07 although news reports indicated Drew & Napier as representing the sellers (19-21 Jun 07) earlier]
Lawyer for Buyer: K Shanmugam and William Ong from Allen & Gledhill
Reason: Deal not done in good faith. Objection to Price. Not satisfied with SC's performance, SC not canvassing views of owners prior to sale despite improved market conditions.
Details: Owners (both majority and minority) objected to the fact that estate was sold 'on the cheap' in Feb 07 at $850psf when 6 mths later, Grangeford nearby is asking for over $2000. Offer price for Horizon was made in Apr 06 and in the following 9 mths, property prices surged to the extent price was outdated. Effort to mediate between objectors and SC failed so hearing to be conducted. 39 owners initiated EOGM to replace Sale Committee but was unsuccessful (acting for several owners - Senior Counsel C.R. Rajah of Tan, Rajah and Cheah). Application for judicial review of STB's decision not to postpone hearing rejected.

[Note: All information provided here summarised/extracted from BT/ST news sources. For sake of brevity and reading, references are omitted but if you wish to have them please contact me. Likewise for errors.]

Tags: Horizon Towers, Grangeford Apartments, STB mediation, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, real estate, singapore

Bringing the fight to the Courts - Futura Condo

I'll be compiling a new series of information that might be useful for minority owners/objectors. They will go under the label - "Going to Court" and will provide details of reasons why objectors are bringing their cases to court or STB for mediation, who are the lawyers representing the minorities, etc.

Now bearing in mind that only one en bloc has been rejected from collective sale by STB, this may be seen by many as a futile gesture or even a waste of time. But one must remember:-

1. Almost all collective sales nowadays have not reached the full 100% consensus (with many going into expressions of interest because they have not even reached 80%). That means there's a lot of minority owners, people who are not happy with the sale of their homes for whatever reasons.
2. The news will almost never report objections made by minority owners for every en bloc done. Rather, it'll be the juicy 'news-worthy' ones that make the headlines. Judging by recent reports of the heavy overload of work on the part of the STB, it appears there are increasing objections made for en bloc sales.
3. Remember the Waterfront View couple that brought their fight all the way to High Court. Even though they lost, the landmark rulings by STB and the Courts on the definition of financial loss clarified the situation for many. The battle now, from what I can see, is on the grounds of what constitutes 'good faith'.
   

So let's start the ball rolling with the spaceship condo that I liked so much:-

Estate: Futura Condominium, Leonie Hill Road
Stage: STB approved sale 23/5/07, Appeal to Court on 20/7/07 before Justice Woo Bih Li
Party: 7 minority owners represented by Henry Heng Gwee Nam of Tan Peng Chin LLC
Majority Lawyer: Mr Matthew Saw of Lee & Lee
Reason: Deal not done in good faith.
Details: Within 3 hrs on 23/10/06, RP reduced from $291m to $287.3. No land survey conducted; No minutes kept of SC meetings; No owners' meeting called before RP reduction. STB failed to take into account allegation that SC failed to discharge its obligations. Reduced RP was unauthorised.

Tags: minority owners, objectors, court, stb hearing, stb mediation, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, real estate, singapore

Who Needs a Pro-Tem Sale Committee?

In an worrying twist to the en bloc madness, I witnessed over the weekend a troubling new incident. Now, traditionally, to begin the en bloc process, the following stakeholders are involved in the following sequence :-

1. Step One: PTSC - Group of like-minded subsidiary proprietors (aka owners) get together and commit to the task. This is the pro-tem sale committee (PTSC) which need not be voted in or nominated.
   
2. Step Two: Agent - The PTSC contacts property agents (typically real estate investment division) to draw their attention to the estate, and to ask them to give presentations to the PTSC.
3. Step Three: Owners - The PTSC nominates the most suitable agent to present to the remaining owners and begin the CSA.

I went to an agent presentation this weekend, in an estate in District 10, one of the few remaining super prime estates near numerous conveniences (embassies, up and coming eating places, schools, national park etc), and the above order is reversed. In other words:-

1. Step One: Owners invited to agent presentation. Agent obtained information on SPs on their own accord (this was found out quickly when not all SPs received the invitation letter).
2. Step Two: Agent encouraged those SPs present to nominate them as their en bloc agent.
3. Step Three: Agents then begin the process of soliciting PTSC members.

What this means is that the agent actually went into an estate, without any official invitation by any SP at all, to offer their services, make a presentation on selling the estate collectively, and then asks owners who would like to form the PTSC.

The key word here is "without any official invitation by any SP". Has the Wild Wild West expanded its frontier again in the story of enbloc madness? Can any agent go into an estate now, particularly one in a prime location, and present themselves as a suitable agent for the SPs?

Technically, yes.

The law is so open about the protocols for starting en blocs that nothing prevents this from happening. In fact, nothing can stop any number of agents (typically citing that they have X number of developers they're in talks with, who have expressed 'deep interest' in the land) from going into an estate uninvited, unwarranted, and give their sales pitch. Again and again. Without any invitation by any SP.

This brings new meaning to "representing the interests of all subsidiary proprietors" when they begin the process without any SP in mind at all, or without their permission. It certain indicates strongly that this is a self-serving agent who has taken the term "proactive" to a whole new level. And with such an agent, how can any owner be assured that they will be sufficiently represented, or their assets protected from any unscrupulous methods or tricks that an agent might do?

We're not talking about some chap putting a leaflet under the windscreen wiper of your vintage Rolls Royce when it's parked outside. We're talking about a guy walking into your home unannounced, saying he's interested in your car, he has your details, no need to testdrive he's already checked it all out, and claiming he has several buyers interested in it. Just agree to him being your sole agent and he'll sell your car for you, whether you wanted to or not. The buyer will of course pimp it up (or in mrbrown's term, zhng your car).

My good friend who stayed in this estate felt very angry about this whole deal, and especially violated by this agent who came into the estate without permission and started talking about selling it all off.

If the law does nothing about this, I fear more agents will be attempting the same trick in hopes of securing that juicy agreement that will fatten their coffers courtesy of a successful en bloc.

Tags: sale agents, en bloc sale agents, collective sales agents, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, collective sale, singapore, real estate, Enblocing Singapore

The Worrying Trend of Self-Replicating Committees

A good friend just contacted me, upset and frustrated. Her estate, Botanic Gardens View (BGV), has popped out another Sale Committee. Out of the blue. With another property agent (Huttons) while the first Sale Committee (SC) is still active (with CBRE). Looks like a two way fight has begun in her estate to garner interest and signatures.

The difference that the 2nd SC and agent is offering for owners of BGV? 1-for-1 exchange.

In and of itself, an enticing carrot and certainly a compromise for those owner-occupiers who wish to continue staying there. Move out for 3 years, move back in, presto, brand new apartment.

Except it's not really a collective exchange - the flats are 30% smaller, there's no guarantee what floor, face, etc you'll get. It's also doubtful if people opting for the exchange will have any say whatsoever in the design of the new apartments. In other word, not only are you getting a smaller flat, you're going in blind.

That's partly why collective exchanges are (a) damn difficult, (b) handled with finesse by a few small law firms such as Phang & Co, (c) appealing but in reality having the potential to shortchange owner-occupiers in the end.

But the carrot isn't the point. The worrying fact is that while the first SC has barely started to get around to collecting signatures, the second has emerged. Each with their own carrots.
Who's to say a third, with Ah Beng Agency ("we force your signature by hook or by crook, both sure painful wan") will not emerge? Or a fourth, or fifth? I wrote about the problem of multiple SCs in the past, in the case of Watten Estate, and it looks like BGV's hit with that issue too.

With the development charge increase, developers are now getting fussier in selecting which en bloc to go for (if any). But now all it takes is an eager agency to step in, offer their services (often 'free') so long as a group of like-minded owners is willing. And prime spots like BGV are in demand nowadays, with agencies very keen to win the 80% signature race and get the windfall (along with the owners of course).

Sure it means 'greater choice' for owners, but think this through:-

1. If an owner signs the CSA with Agent A, can he sign the CSA with Agent B as well? What are the consequences if he does so, and which CSA is valid (or are they nullified)?
2. One CSA is already legally tricky (full of legal terms, definitions, loopholes even), but two? Agents and lawyers will give you the short and sweet version during their presentations of what's included in the CSAs, but you can NOT trust what is said because it is what is NOT said that is equally important (sometimes more so). Many en bloc'd estates are now beginning to realise that their CSAs contain clauses that give a lot of their rights away, or have hidden clauses that allow SCs to do unscrupulous things (such as 'bribe' fencesitting minority owners with your money). Considering the multi-million dollars nature of some of the sales, you must be careful and go through each clause. That's double the time needed now, what with 2 CSAs/agents/lawyers/SCs.
3. Under what conditions will one SC bow out of the competition? If two SCs were to compete within the same estate, and each owner can sign only ONE CSA, that's a 50% distribution between the 2 CSAs. This means one may never achieve 80% unless one SC quits and nullifies their CSA. So when should one SC quit in favour of the other (considering both are self-interested/selfish groups who's going to blink first in the showdown)? Under what protocols (eg if an SC is able to achieve 50% in 6 mths time, the other should give up) or rules of the competition?
4. 2 SCs = 2 aggressive groups of people out for your signature = double the hassle and double the annoyance if things get out of hand between the 2 SCs. Given that there's no need for professionalism between the two competitors it can become a slugfest with owners caught in the middle (eg half-truths hurled against the opposite party). Imagine - Monday Huttons rings your bell, Tue CBRE rings your bell, Wed Huttons comes back to clarify some stuff CBRE might have said, Thu another party calls you to say that "the other party smokes pot", Fri both parties call you to say that "the competitor is in league with Voldemort, don't go near them". Sat you just want to cast the Cruciatus Curse on the SCs. Sun you plan to expelliarmus the annoying SC mugglies and boot them out of the estate.
   
5. Shouldn't there be some regulations that management committees can set up for the creation of SCs, to curb the potential rampant replication? Considering that any SC must work with the MC, or for that matter, obtain the owners' list from the MC, couldn't MCs impose non-refundable fees for any SCs that wish to set up shop? Such fees must come from the SCs themselves, and cannot be deducted from the sale proceed if successful. The fees can then go into the sinking funds for communal use, and should be a significant sum (eg $5000 per SC member) to deter the frivolous creation of SCs. That way, owners know that these SCs are serious about their intention to help sell the estate, and not there for their own self-interests.

In the meantime, I wish BGV owners good luck in their 2 way fight. Looks like it's going to get complicated.

Tags: botanic gardens view, botanic garden view, taman serasi, multiple sales committees, multiple sale committees, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore, real estate

Bayshore Park Blog on En-Bloc & Deposit Interests

En bloc madness has hit the east. A look at the latest postings on this thread in an expat forum shows how the thread has been hijacked by locals who are largely there hoping to obtain tips and hence jump onto the en bloc bandwagon (rather than the original thread's purpose of informing expats on which estates are going en bloc).

Neptune Court, Laguna Park, Mandarin Gardens, Bayshore Park, Lagoon View, Fernwood Towers - all massive estates on the east side and if the discussion on the thread is anything to go by, each of these estates are hoping to go enbloc or going to go en-bloc. Of course, until the news is officially publicised in the newspapers, take such information with a major pinch of salt. Nevertheless, the inevitability of the enbloc craze means that it's only a matter of time before the Easterners start the frenzy there. I won't even imagine how many owners are going to be cash-rich and property-poor if all of them succeed.

In the midst, another en bloc blog has appeared - Bayshore Park - which is proactive and begun obtaining signatures from owners to block the enbloc. They have apparently received over 20% which means that fierce resistance is due upon them.

And there's been a recent furore over a matter of fine print in the Collective Sale Agreement (CSA) - the issue of what happens to the interest gained from the deposits that developers hand over to the lawyers. The Law Society's stand is clear - "As a matter of law, if there is no agreement otherwise amongst buyer, seller and stakeholder, the interest earned on the stake belongs to the stakeholder". Imagine, a deposit of $50 million generates (easily) $500,000 interest which can go to the lawyers if they are unscrupulous enough not to include clauses in the CSA that ensures the interest goes to the owners. The CondoForum contains the newspaper articles on this matter so do read that up but in short - make sure what happens to the interest gained when the sums are placed somewhere, is explicitly mentioned in the CSA.

Just updated the Enbloc list, which is getting longer and longer.

Tags: Bayshore Park, Neptune Court, Laguna Park, Mandarin Gardens, singapore, real estate, property, enbloc sale, enbloc, en-bloc sale, en-bloc, en bloc, condo, collective sales, collective sale, Enblocking Singapore